U.S. challenges China trade rules

Complaints focus on downloading films, music

HONG KONG – The U.S. said that it may include Chinese regulations on downloading of music and films as part of its ongoing complaint against China about trade in entertainment products and services.

Speaking at the World trade Organization in Geneva on Wednesday, Stephen Norton, a spokesman for the Office of the U.S. Trade Representative, said that Washington is seeking consultations with China.

Downloading rules appear to discriminate against foreign sound recordings and films, he said. Hollywood studios and U.S. Internet music providers like Apple’s iTunes may suffer from “less favorable distribution opportunities” for imported films and foreign suppliers of music recordings in China,

Norton pointed to similar discrimination when Chinese consumers seek to download music onto mobile phones.

The Chinese entertainment sector is one of the most controlled parts of the Chinese industrial landscape and foreign firms face considerable operational restrictions, including rules that prevent foreign companies from owning or investing in businesses that distribute music over the Internet.

Earlier this year the U.S. angered Beijing when it filed notice of two actions to be pursued against China through the W.T.O. concerning pirated copies of music and movies and another for placing market-access barriers against U.S. companies offering legitimate products.

The move to the WT.O. over downloading now triggers a 60-day consultation period. If the two fail to resolve the dispute Washington is expected to add the downloading complaint to the two existing actions.

“Imported films can be distributed within China only by two entities and only on a nationwide basis,” the statement said. Chinese films, by contrast, are not limited to two distribution companies and can be released nationally, provincially or locally, it added.